What questions should entrepreneurs ask themselves before launching a product? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Well, the answer is in 4 parts. If you don't seriously consider these 4 components, run away from your product idea screaming.
#1- What problem does my product or service solve?
#2- Do customers feel that solving this problem is urgent?
#3- How much will they pay for a solution to the problem?
#4- Are there enough of these people to justify creating and marketing the solution?
As the group Chicago once sang: "Does anyone really know what time it is? Does anyone really care?". Don't launch a business if not enough people care.
A (sad) story
The father of my son's best friend in 8th grade was a tech manager. Worked in some very challenging situations. He decided to go out on his own. Now that step-on the surface- may be fine. Tech managers, after all, are in high demand. If he offered the right tech products and services, he may have found a market.
But he didn't.
He decided to spend nearly $250,000 on a software application. The software allowed sports teams to schedule games, enroll players, and track payments. It was designed to attract grade school and high school sports teams. He designed the product without considering the steps listed above.
Sadly, the idea didn't work.
How to think through this process and solve the problem
Say, for example, that you create a bike tire tube that inflates at the push of a button. No need for a pump or an CO-2 cartridge to inflate the tire. If you're a bike rider, you know how difficult it can be to change a flat. You may be in bad weather, or a dangerous location on the road.
Survey your customers and prospects. Sure, they see that changing a flat is a problem-but is it urgent? Assume that you find that yes, people believe that they need a better way to change a flat tire.
Next question in the survey: how much would you pay for it? Would you pay $5 per tube, Mr. Prospect? Get that type of feedback.
Assume that 2,000,000 people in the US consider themselves serious bike riders. These people ride lots of miles every week. They'd be willing to pay $5 per tube. These bikers estimate that they'd get 2 flats a month that would require your bike tube. Your market size is (2,000,000 bike riders X $5 X 2 times per month = $20,000,000 monthly sales).
How much of that $20,000,000 market can you capture each month? Now, you have a viable business idea. And by the way: you can make this same case to potential investors.
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